Tuesday, December 2, 2014

GOLD!

Gold peaked towards the end of 2011 after several years of
increased bullish momentum. The peak (wave 1) completed and the bearish
correction started in an impulsive mood for the next 3 years and that’s where
we are now.

I posted more than one times how I expected Gold to close at
1000 before the end of this year, but that idea appears to be melting as Gold
is looking increasingly more bullish than bearish.

With a bullish divergence on the weekly chart, wave 5 that I
expected to continue might have ended anyway at just 61.8% extension of wave 1;
I usually look for 100% - 127% projection ( 1000 is the 100% projection).

With the price of Oil dipping, one will expect Federal
reserves, Oil producers and large oil investors to leverage/protect their funds
and investment by buying more Gold in their reserves which will eventually make
it rally for at least a year.

Also as compiled by the CFTC in their weekly Commitment of
traders reports which shows the position of gold traders who use futures and
options. Small Traders (traders who hold positions under the minimum reporting
requirements to the CFTC) are holding their biggest net short position for
15years while the Commercials are holding their biggest long position for the
same period. This is a bullish indication.

On the 4 hour chart, there is a clear 5-wave impulsive move
which looks ended and price is reacting upside. Price should continue moving
upside from here.

Getting the picture clearer on the intraday chart, the
first move of the expected bullish journey was a clear leading diagonal which
gave me 500pips before price picked up to continue the move.

Presently, price
is getting ready for the third wave of the A (impulsive move) leg of the
bullish retracement.

I will wait till price get to 1170-1180 (intraday support
zone) before taking a decision to buy.